GFI Group Launches Northeast Gas Basis Trading on EnergyMatch®

Adding to Group’s broad electronic trading of energy products

New York, October 31, 2011 – GFI Group Inc. (NYSE: “GFIG”) announced today that it has successfully launched a number of  Northeast Gas Basis products on EnergyMatch®, GFI’s leading electronic trading platform for energy and commodities in North America and executed a number of trades for clients on the system.

GFI Group Inc. (NYSE: “GFIG”) announced today that it has successfully launched and traded a number of  Northeast Gas Basis products on EnergyMatch® , GFI’s leading electronic trading platform for energy and commodities in North America.

The new product offering caters not only to gas basis traders but to Northeast power traders enabling them to trade Northeast gas basis markets alongside EnergyMatch’s competitive electronic power markets on one screen.

Richard Giles, GFI Managing Director Energy and Commodities North America, said: “we are pleased to offer our clients, especially the northeast traders, another means of execution. Our hybrid mix of experienced professionals and leading edge technology combined with a choice of clearing venue will enhance and simplify the trading experience for our customers “.

EnergyMatch is a web-based electronic marketplace offering clients the ability to trade thousands of unique swap products ranging from physically cleared west power swaps to financial gas basis. Energymatch® integrates liquidity from desks at both GFI and its subsidiary Amerex, as well as dedicated screen market makers to offer one liquidity pool displaying firm and tradable prices with the ability to clear at any venue the end user chooses.

Energymatch® currently serves the following markets: East Power, Zonal Power, ERCOT Power, Physically Cleared West Power, Natural Gas Options and now Gas Basis.

About GFI Group Inc.

GFI Group Inc. (NYSE: “GFIG”) is a leading provider of wholesale brokerage services, clearing services, electronic execution and trading support products for global financial markets. GFI Group Inc. provides brokerage services, market data, trading platform and analytics software products to institutional clients in markets for a range of fixed income, financial, equity and commodity instruments.

Headquartered in New York, GFI was founded in 1987 and employs more than 2,000 people with additional offices in London, Paris, Hong Kong, Seoul, Tokyo, Singapore, Sydney, Cape Town, Santiago, Bogota, Dubai, Dublin, Tel Aviv, Calgary, Los Angeles, Nyon and Sugar Land (TX). GFI Group Inc. provides services and products to over 2,600 institutional clients, including leading investment and commercial banks, corporations, insurance companies and hedge funds. Its brands include GFISM, GFInet®, CreditMatch®, GFI ForexMatch®, EnergyMatch®, FENICS®, Starsupply®, Amerex®, Trayport® and Kyte®.

Forward-looking statement

Certain matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipate,” “believe,” “estimate,” “may,” “might,” “intend,” “expect” and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of GFI Group Inc. (the “Company”) and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: economic, political and market factors affecting trading volumes; securities prices or demand for the Company’s brokerage services; competition from current and new competitors; the Company’s ability to attract and retain key personnel, including highly-qualified brokerage personnel; the Company’s ability to identify and develop new products and markets; changes in laws and regulations governing the Company’s business and operations or permissible activities; the Company’s ability to manage its international operations; financial difficulties experienced by the Company’s customers or key participants in the markets in which the Company focuses its brokerage services; the Company’s ability to keep up with technological changes; uncertainties relating to litigation and the Company’s ability to assess and integrate acquisition prospects. Further information about factors that could affect the Company’s financial and other results is included in the Company’s filings with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

GFI Group Inc. Announces Third Quarter 2011 Results; Declares Quarterly Cash Dividend

– GAAP Total Revenues: $276.0 Million; Non-GAAP Total Revenues: $272.9 Million

NEW YORK, Oct. 27, 2011 /PRNewswire/ — GFI Group Inc. (NYSE: GFIG; GFI or The Company), a leading provider of wholesale brokerage services, clearing services, electronic execution and trading support products for global financial markets, reported today its financial results for the third quarter ended September 30, 2011.

Highlights

  • GAAP net revenues were $238.5 million for the third quarter of 2011, an increase of 30.1% from $183.2 million in the third quarter of 2010.  On a non-GAAP basis, net revenues increased 25.1% to $235.4 million from $188.1 million in the third quarter of 2010.  
  • Brokerage revenues for the third quarter of 2011 increased 22.0% to $213.2 million on both a GAAP and a non-GAAP basis, as compared with $174.7 million in the third quarter of 2010.  
  • Compensation and employee benefits expense in the third quarter of 2011 was 67.1% and 68.0% of net revenues on a GAAP and non-GAAP basis, respectively. This compares with 72.8% and 70.9% of net revenues on a GAAP and non-GAAP basis, respectively, in the third quarter of 2010.  
  • Non-compensation expenses were 29.1% of net revenues on a GAAP basis and 24.7% on a non-GAAP basis in the third quarter of 2011.  This compares with 29.1% of net revenues on a GAAP basis and 26.1% on a non-GAAP basis in the third quarter of 2010.
  • GAAP net income for the third quarter of 2011 was $6.1 million, or $0.05 per diluted share, compared with a net loss of $2.5 million, or $0.02 per diluted share, in the third quarter of 2010.  On a non-GAAP basis, net income was $11.6 million, or $0.09 per diluted share, for the third quarter of 2011, compared with $3.7 million, or $0.03 per diluted share, in the third quarter of 2010.
  • For the nine months ended September 30, 2011, GAAP net revenues were $676.2 million, up 13.0%, compared with $598.6 million for the same period in 2010.  Net income on a GAAP basis for the first three quarters of 2011 was $19.0 million, or $0.15 per diluted share, compared to $21.3 million, or $0.17 per diluted share, in the first three quarters of 2010.  On a non-GAAP basis, net revenues for the nine months ended September 30, 2011 were $681.9 million, up 13.2%, compared with $602.5 million in the same period in 2010, while net income for the first three quarters of 2011 was $34.0 million, or $0.27 per diluted share, compared with $30.1 million, or $0.24 per diluted share, in the same period of 2010.
  • Beginning with this release, GFI will report “cash earnings” and “cash earnings per share.”  Cash earnings are a non-GAAP measure of operating performance which reflects cash generated from GFI’s ongoing operations that management considers available for distribution to shareholders, reinvestment in the business or other business purposes.  Cash earnings excludes depreciation and amortization, including the amortization of restricted stock units and cash sign-on bonuses, as well as the non-operating, non-recurring or non-cash items adjusted to arrive at GFI’s non-GAAP net income.  The amount of actual distributions to shareholders in any period will typically be less than the cash earnings for that period.  
  • Cash earnings for the three month period ended September 30, 2011 were $32.0 million, or $0.26 per diluted share, as compared with $22.4 million, or $0.18 per diluted share, for the same period in 2010.  Cash earnings were $94.9 million, or $0.75 per diluted share, for the nine months ended September 30, 2011, a 7% increase over the $88.8 million, or $0.71 per diluted share, generated in the same period of 2010.

Michael Gooch, Chairman and Chief Executive Officer of GFI, commented: “Non-GAAP net revenues were up 25.1% year-over-year as volatile market conditions, our efforts to expand and further diversify our business and our growing software, analytics and market data businesses led to significant revenue growth across all brokerage product categories and regions, as well as across all business segments.  This broad-based growth included brokerage revenues increasing 22.0%, Kyte non-GAAP net revenues increasing 117.8%, Trayport software revenues rising 34.9% and analytics and market data product revenues increasing 11.5%, year over year.

“We saw double digit growth across all brokerage product categories and geographical regions as we benefitted from our investments to diversify our product and geographical reach, as well as from our increasingly strong position in emerging markets globally.  It should be noted that last week we announced the opening of our new office in Nyon, Switzerland that will initially focus on emerging market financial and fixed income products, complementing our existing emerging market business in London.  We will continue to invest in areas that provide for synergies with our trading platforms, have growth potential, are complementary to our existing businesses and aim to achieve an attractive return on our investment.

“Compensation and employee benefits expense and non-compensation expenses showed improvement as a percentage of net revenues on a GAAP and a non-GAAP basis, largely due to higher revenues.  We continue to monitor and review our cost structure and will provide additional information regarding our cost reduction initiatives in the coming quarters.  

“Looking at October 2011 to date, our preliminary brokerage revenues for the month are tracking up 3% compared with brokerage revenues for the same month last year.  This October performance follows an active and volatile third quarter in which the U.S. and European debt crises and global economic fears unsettled the markets.  

“We remain fully-engaged with regulators in the U.S. and Europe as OTC derivative market rules are developed defining certain aspects of how we will do business in the future.  We also continue to invest in our technology and infrastructure to transition our derivative brokerage operations to the new market landscape post-regulation.

“We introduced additional non-GAAP performance metrics this quarter and will now report cash earnings and cash earnings per share, which, we believe, provide more insight into the cash generating capabilities of our business.   Our cash earnings per diluted share for the third quarter of 2011 were up 44% to $0.26 per share as compared with $0.18 per share in the year ago period.”

Mr. Gooch concluded:  “We are pleased to declare a quarterly cash dividend of $0.05 per share to our shareholders.”

Revenues

Total revenues were $276.0 million and $272.9 million on a GAAP and non-GAAP basis, respectively, in the third quarter of 2011, as compared with $210.0 million and $214.9 million on a GAAP and non-GAAP basis in the third quarter of 2010.  Net revenues were $238.5 million and $235.4 million on a GAAP and non-GAAP basis, respectively, in the third quarter of 2011, as compared with $183.2 million and $188.1 million on a GAAP and non-GAAP basis in the third quarter of 2010.  Non-GAAP net revenues in the third quarter of 2011 excluded a $4.2 million mark-to-market gain on forward hedges of future foreign currency revenues and a $1.2 million mark-to-market loss related to a future purchase commitment.

Brokerage revenues in the third quarter of 2011 were $213.2 million compared with $174.7 million in the third quarter of 2010.  By product category, brokerage revenues for the third quarter of 2011 increased 18.1% in fixed income, 32.3% in financial, 23.2% in equity and 16.5% in commodity, compared with the third quarter of 2010.  Likewise, by geographic region, brokerage revenues for the third quarter of 2011 increased 25.6% in Europe, the Middle East and Africa; 25.8% in Asia-Pacific; and 16.8% in the Americas, compared with the third quarter of 2010.  

Revenues from trading software, analytics and market data products for the third quarter of 2011 were $18.8 million, up 26.4% from the third quarter of 2010.  

Expenses

For the third quarter of 2011, compensation and employee benefits expense was $160.0 million on a GAAP and non-GAAP basis, compared with $133.3 million on a GAAP and non-GAAP basis in the third quarter of 2010.  Compensation and employee benefits expense decreased to 67.1% and 68.0% of net revenues on a GAAP and non-GAAP basis, respectively, in the third quarter of 2011 from 72.8% and 70.9% of net revenues on a GAAP and non-GAAP basis in 2010.  

On a GAAP basis, non-compensation expenses for the third quarter of 2011 were $69.5 million, or 29.1% of net revenues, compared with $53.3 million, or 29.1% of net revenues, in the third quarter of 2010.  On a non-GAAP basis, non-compensation expenses for the third quarter of 2011 were $58.1 million, or 24.7% of net revenues, compared with $49.2 million, or 26.1% of net revenues, in the third quarter of 2010.  Non-GAAP non-compensation expenses in the third quarter of 2011 excluded $6.0 million of redemption costs related to our Senior Notes that were due in 2013, a $2.3 million write-down on an investment in an unconsolidated affiliate and $3.1 million in intangible asset amortization.  

The effective tax rate for the nine months ended September 30, 2011 was 28.0% on a GAAP basis and 30.0% on a non-GAAP basis.  This compares with 31.0% on both a GAAP and a non-GAAP basis in the first nine months of 2010, and 18.5% on a GAAP basis and 25.0% on a non-GAAP basis for the full-year 2010.

Earnings

Net income on a GAAP basis for the third quarter of 2011 was $6.1 million, or $0.05 per diluted share, compared with a net loss of $2.5 million, or $0.02  per diluted share, in the third quarter of 2010.  On a non-GAAP basis, net income for the third quarter of 2011 was $11.6 million, or $0.09 per diluted share, compared with $3.7 million, or $0.03 per diluted share, for the third quarter of 2010.

On a non-GAAP basis, cash earnings for the third quarter of 2011 were $32.0 million, or $0.26 per diluted share, compared with $22.4 million, or $0.18 per diluted share, for the same period in 2010.

Nine Month Results

Net revenues for the nine months ended September 30, 2011 were $676.2 million on a GAAP basis, compared to net revenues of $598.6 million for the nine months ended September 30, 2010.  Net income was $19.0 million, or $0.15 per diluted share, for the nine months ended September 30, 2011 compared with net income of $21.3 million, or $0.17 per diluted share, for the same period in 2010.

On a non-GAAP basis, net revenues for the nine months ended September 30, 2011 were $681.9 million compared to $602.5 million for the same period in 2010.  Net income was $34.0 million, or $0.27 per diluted share, for the nine months ended September 30, 2011 compared with net income of $30.1 million, or $0.24 per diluted share, for the first nine months of 2010.

On a non-GAAP basis, cash earnings for the nine months ended September 30, 2011 were $94.9 million, or $0.75 per diluted share, compared with $88.8 million, or $0.71 per diluted share, for the same period in 2010.

Non-GAAP Financial Measures

To supplement GFI’s unaudited financial statements presented in accordance with GAAP, the Company uses certain non-GAAP measures of financial performance.  The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies.  In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP.  The non-GAAP financial measures used by GFI include non-GAAP total revenues, non-GAAP net revenues, non-GAAP net income, non-GAAP diluted earnings per share, cash earnings and cash earnings per share. These non-GAAP financial measures currently exclude from the Company’s statement of income amortization of acquired intangibles and certain other items that management views as non-operating, non-recurring or non-cash as detailed in the reconciliation included in the financial tables attached to this release.

In addition, GFI may consider whether other significant non-operating, non-recurring or non-cash items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses.  The non-GAAP financial measures also take into account estimated adjustments to income tax expense with respect to the excluded items.

GFI believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the Company’s performance by excluding certain items that may not be indicative of the Company’s core business, operating results or future outlook.  GFI’s management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing the Company’s operating results, as well as when planning, forecasting and analyzing future periods.  These non-GAAP financial measures also facilitate comparisons of the Company’s performance to prior periods.

In addition to the reasons stated above, which are generally applicable to each of the items GFI excludes from its non-GAAP financial measures, the Company believes it is appropriate to exclude amortization of acquired intangibles because when analyzing the operating performance of an acquired business, GFI’s management focuses on the total return provided by the investment (i.e., operating profit generated from the acquired entity as compared to the purchase price paid) without taking into consideration any charges for allocations made for accounting purposes.  Further, because the purchase price for an acquisition necessarily reflects the accounting value assigned to intangible assets, when analyzing the operating performance of an acquisition in subsequent periods, the Company’s management excludes the GAAP impact of acquired intangible assets on its financial results.  GFI believes that such an approach is useful in understanding the long-term return provided by an acquisition and that investors benefit from a supplemental non-GAAP financial measure that excludes the accounting expense associated with acquired intangible assets.

A reconciliation of these non-GAAP financial measures to GAAP is included in the financial tables attached to this release.

Dividend Declaration

The Board of Directors of GFI has declared a quarterly cash dividend of $0.05 per share payable on November 30, 2011 to shareholders of record on November 15, 2011.

Conference Call

GFI has scheduled an investor conference call to discuss its third quarter results at 8:30 a.m. (Eastern Time) on Friday, October 28, 2011. Those wishing to listen to the live conference call via telephone should dial 1-800-860-2442 in North America and +1-412-858-4600 in Europe, and ask for “GFI”.

A live audio web cast of the conference call will be available on the Investor Relations section of GFI’s Website. For web cast registration information, please visit: http://www.gfigroup.com. Following the conference call, an archived recording will be available at the same site.

Supplementary Financial Information

GFI has posted details of its historical monthly brokerage revenues on the Investor Relations page of its web site under the heading Supplementary Financial Information. The Company currently plans to post this information quarterly in conjunction with its announcement of earnings, but does not undertake a responsibility to continue to provide or update such information.

About GFI Group Inc.

GFI Group Inc. (NYSE: “GFIG”) is a leading provider of wholesale brokerage services, clearing services, electronic execution and trading support products for global financial markets. GFI Group Inc. provides brokerage services, market data, trading platform and analytics software products to institutional clients in markets for a range of fixed income, financial, equity and commodity instruments.

Headquartered in New York, GFI was founded in 1987 and employs more than 2,200 people with additional offices in London, Paris, Nyon, Hong Kong, Seoul, Tokyo, Singapore, Sydney, Cape Town, Santiago, Bogota, Dubai, Dublin, Tel Aviv, Calgary, Los Angeles and Sugar Land (TX). GFI Group Inc. provides services and products to over 2,600 institutional clients, including leading investment and commercial banks, corporations, insurance companies and hedge funds. Its brands include GFI(SM), GFInet®, CreditMatch®, GFI ForexMatch®, EnergyMatch®, FENICS®, Starsupply®, Amerex®, Trayport® and Kyte®.

Forward-looking statement

Certain matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipate,” “believe,” “estimate,” “may,” “might,” “intend,” “expect” and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of GFI Group Inc. (the “Company”) and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: economic, political and market factors affecting trading volumes; securities prices or demand for the Company’s brokerage services; competition from current and new competitors; the Company’s ability to attract and retain key personnel, including highly-qualified brokerage personnel; the Company’s ability to identify and develop new products and markets; changes in laws and regulations governing the Company’s business and operations or permissible activities; the Company’s ability to manage its international operations; financial difficulties experienced by the Company’s customers or key participants in the markets in which the Company focuses its brokerage services; the Company’s ability to keep up with technological changes; uncertainties relating to litigation and the Company’s ability to assess and integrate acquisition prospects. Further information about factors that could affect the Company’s financial and other results is included in the Company’s filings with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

– FINANCIAL TABLES FOLLOW –

=IR=

GFI Group Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

(In thousands except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2011

2010

2011

2010

Revenues

Agency commissions

$      151,446

$      125,011

$      435,442

$      406,465

Principal transactions

61,711

49,677

186,673

166,499

Total brokerage revenues

213,157

174,688

622,115

572,964

Clearing services revenues

31,872

21,553

87,222

21,553

Interest income from clearing services

606

232

1,618

232

Equity in net earnings of unconsolidated businesses

4,260

1,875

9,943

1,886

Software, analytics and market data

18,837

14,905

54,328

44,324

Other income (loss)

7,230

(3,263)

5,917

(595)

   Total revenues

275,962

209,990

781,143

640,364

Interest and transaction-based expenses

Transaction fees on clearing services

30,388

20,729

84,209

20,729

Transaction fees on brokerage services

6,673

5,887

19,357

20,865

Interest expense from clearing services

439

138

1,382

138

Total interest and transaction-based expenses

37,500

26,754

104,948

41,732

Revenues, net of interest and transaction-based expenses

238,462

183,236

676,195

598,632

Expenses

Compensation and employee benefits

159,980

133,345

466,300

419,117

Communications and market data

15,187

13,788

45,364

36,369

Travel and promotion

9,723

8,665

30,124

26,899

Rent and occupancy

6,322

5,867

18,183

16,553

Depreciation and amortization

9,990

8,851

29,665

24,879

Professional fees

6,866

7,055

19,641

19,899

Interest on borrowings

12,035

3,066

18,247

8,371

Other expenses

9,353

5,984

21,559

15,437

  Total other expenses

229,456

186,621

649,083

567,524

Income (loss) before provision for (benefit from) income taxes

9,006

(3,385)

27,112

31,108

Provision for (benefit from) income taxes

2,884

(1,050)

7,592

9,643

Net income (loss) before attribution to non-controlling shareholders

6,122

(2,335)

19,520

21,465

Less: Net income attributable to non-controlling interests

57

151

558

151

GFI’s net income (loss)

$          6,065

$        (2,486)

$        18,962

$        21,314

Basic earnings (loss) per share

$            0.05

$          (0.02)

$            0.16

$            0.18

Diluted earnings (loss) per share

$            0.05

$          (0.02)

$            0.15

$            0.17

Weighted average shares outstanding – basic

117,717,234

121,943,158

119,187,808

120,059,960

Weighted average shares outstanding – diluted

125,420,736

121,943,158

127,052,814

124,665,379

GFI Group Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

As a Percentage of Net Revenues

Three Months Ended

Nine Months Ended

September 30,

September 30,

2011

2010

2011

2010

Revenues

Agency commissions

63.5%

68.2%

64.4%

67.9%

Principal transactions

25.9%

27.1%

27.6%

27.8%

Total brokerage revenues

89.4%

95.3%

92.0%

95.7%

Clearing services revenues

13.4%

11.8%

12.9%

3.6%

Interest income from clearing services

0.3%

0.1%

0.2%

0.1%

Equity in net earnings of unconsolidated businesses

1.8%

1.0%

1.5%

0.3%

Software, analytics and market data

7.8%

8.1%

8.0%

7.4%

Other income (loss)

3.0%

-1.7%

0.9%

-0.1%

   Total revenues

115.7%

114.6%

115.5%

107.0%

Interest and transaction-based expenses

Transaction fees on clearing services

12.7%

11.3%

12.4%

3.5%

Transaction fees on brokerage services

2.8%

3.2%

2.9%

3.5%

Interest expense from clearing services

0.2%

0.1%

0.2%

0.0%

Total interest and transaction-based expenses

15.7%

14.6%

15.5%

7.0%

Revenues, net of interest and transaction-based expenses

100.0%

100.0%

100.0%

100.0%

Expenses

Compensation and employee benefits

67.1%

72.8%

69.0%

70.0%

Communications and market data

6.4%

7.5%

6.7%

6.1%

Travel and promotion

4.1%

4.7%

4.4%

4.5%

Rent and occupancy

2.7%

3.2%

2.7%

2.8%

Depreciation and amortization

4.2%

4.8%

4.4%

4.1%

Professional fees

2.9%

3.8%

2.9%

3.3%

Interest on borrowings

5.0%

1.7%

2.7%

1.4%

Other expenses

3.9%

3.3%

3.2%

2.6%

  Total other expenses

96.3%

101.8%

96.0%

94.8%

Income (loss) before provision for (benefit from) income taxes

3.7%

-1.8%

4.0%

5.2%

Provision for (benefit from) income taxes

1.2%

-0.5%

1.1%

1.6%

Net income (loss) before attribution to non-controlling shareholders

2.5%

-1.3%

2.9%

3.6%

Less: Net income attributable to non-controlling interests

0.0%

0.1%

0.1%

0.0%

GFI’s net income (loss)

2.5%

-1.4%

2.8%

3.6%

GFI Group Inc. and Subsidiaries

Selected Financial Data (unaudited)

(Dollars in thousands)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2011

2010

2011

2010

Brokerage Revenues by Product Categories:

Fixed Income

$            62,585

$          52,975

$ 187,276

$ 185,269

Financial

52,571

39,731

150,673

116,964

Equity

45,785

37,172

138,147

131,325

Commodity

52,216

44,810

146,019

139,406

  Total brokerage revenues

$          213,157

$        174,688

$ 622,115

$ 572,964

Brokerage Revenues by Geographic Region:

Americas

$            83,175

$          71,224

$ 235,780

$ 221,108

Europe, Middle East, and Africa

105,604

84,078

310,666

293,417

Asia-Pacific

24,378

19,386

75,669

58,439

  Total brokerage revenues

$          213,157

$        174,688

$ 622,115

$ 572,964

September 30,

December 31,

2011

2010

Consolidated Statement of Financial Condition Data:

Cash and cash equivalents

$          252,505

$        313,875

Deposits with clearing organizations

29,338

26,845

Total balance sheet cash on hand

281,843

340,720

Balance sheet cash per share

2.36

2.79

Total assets (1)

2,098,150

1,271,024

Total debt, including current portion

250,000

192,446

Stockholders’ equity

477,499

490,711

Selected Statistical Data:

Brokerage personnel headcount (2)

1,258

1,161

Employees

2,148

1,990

Broker productivity for the period (3)

$                 169

$               156

(1) Total assets include receivables from brokers, dealers and clearing organizations of $1,082.0  million and
$243.8 million at September 30, 2011 and December 31, 2010, respectively. These receivables primarily
represent securities transactions entered into in connection with our matched principal business which have
not settled as of their stated settlement dates, as well as balances with clearing organizations. These
receivables are substantially offset by corresponding payables to brokers, dealers and clearing organizations
for these unsettled transactions.

(2)  Brokerage personnel headcount includes brokers, traders, trainees and clerks.  

(3)  Broker productivity is calculated as brokerage revenues divided by average monthly brokerage
personnel headcount for the quarter.  

 GFI Group Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)

(In thousands except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2011

2010

2011

2010

GAAP revenues

$   275,962

$   209,990

$   781,143

$   640,364

Mark-to-market (gain) loss on forward hedges

of future foreign currency revenues

(4,210)

4,078

1,726

3,081

Fair value mark-to-market on future purchase commitment

1,175

809

2,738

809

Recovery of previously reserved balances

(609)

Accounting impact of increased ownership stake in an investee

1,863

Remeasurement of previously held equity interest

Gain on exchange of cost-method investments

Total Non-GAAP Revenues

272,927

214,877

786,861

644,254

GAAP interest and transaction-based expenses

37,500

26,754

104,948

41,732

Non-GAAP revenues, net of interest and transaction based expenses

235,427

188,123

681,913

602,522

GAAP other expenses

229,456

186,621

649,083

567,524

Amortization of intangibles

(3,130)

(2,114)

(9,235)

(4,941)

Debt redemption costs

(5,975)

(5,975)

Writedown of investment in unconsolidated affiliate

(2,255)

(2,255)

Professional & other fees for business development activities

(2,011)

(3,871)

Gain on settlement of pre-acquisition receivable

942

Contract restructuring in contemplation of acquisition

Severance and other restructuring

Non-GAAP other expenses

218,096

182,496

632,560

558,712

Non-GAAP pre-tax income

17,331

5,627

49,353

43,810

Income tax impact on Non-GAAP items

2,796

2,794

7,214

3,937

Non-GAAP provision for income taxes

5,680

1,744

14,806

13,580

Less: Net income attributable to non-controlling interests

57

151

558

151

GFI’s Non-GAAP net income

11,594

3,732

33,989

30,079

Non-GAAP diluted net income per share

$         0.09

$         0.03

$         0.27

$         0.24

Pre-tax adjustments to arrive at cash earnings

Amortization of RSU’s

7,777

6,894

23,186

20,189

Amortization of cash sign-on and retention bonuses

5,803

5,070

17,297

18,606

Depreciation and other amortization

6,860

6,737

20,430

19,938

Total pre-tax adjustments to cash earnings

20,440

18,701

60,913

58,733

Non-GAAP pre-tax cash earnings from ongoing operations

37,771

24,328

110,266

102,543

Non-GAAP provision for income taxes

5,680

1,744

14,806

13,580

Less: Net income attributable to non-controlling interests

57

151

558

151

GFI’s Non-GAAP net cash earnings from ongoing operations

$     32,034

$     22,433

$     94,902

$     88,812

Non-GAAP cash earnings per share

$         0.26

$         0.18

$         0.75

$         0.71

Weighted average shares outstanding – diluted

125,420,736

127,334,469

127,052,814

124,665,379

GFI Group Inc.

Adjusted EBITDA

($ in ‘000’s, except share and per share amounts)

3Q10

4Q10

1Q11

2Q11

3Q11

Last twelve
months (LTM)

Net (loss) income per U.S. GAAP before attribution to non-controlling interests

$ (2,335)

$   4,454

$   7,604

$   5,794

$   6,122

Plus: Net (income) loss attributable to non-controlling interests

(151)

(153)

(858)

357

(57)

GFI’s net (loss) income

(2,486)

4,301

6,746

6,151

6,065

Plus: Extraordinary and other non-recurring (gains)

and losses (i.e., non-GAAP adjustments)

9,012

746

10,066

3,850

8,325

Plus: Interest expense

3,204

2,981

3,262

3,893

6,499

Less: Interest income

(914)

(774)

(690)

(1,090)

(996)

Plus: Income tax (benefit) expense

(1,050)

(3,759)

2,672

2,036

2,884

Plus: Depreciation and amortization expense (excluding intangibles)

6,737

6,678

6,842

6,728

6,860

Plus: Amortization of RSU’s

6,894

6,485

7,492

7,917

7,777

Plus: Amortization of cash sign-on bonuses

5,070

5,823

5,998

5,496

5,803

Adjusted EBITDA

$ 26,467

$ 22,481

$ 42,388

$ 34,981

$ 43,217

$      143,067

Weighted average shares outstanding – diluted

125,420,736

Adjusted EBITDA per share (pre-tax)

$            1.14

SOURCE GFI Group Inc.

GFI Group to Be Presenting Sponsor of Star-Studded Stand Up for Heroes Event, in Association With the Bob Woodruff Foundation and New York Comedy Festival

The Publicly Traded Brokerage Firm Is Standing Up for Wounded Veterans Who Benefit from Proceeds Raised by the Annual Event

NEW YORK, Oct. 20, 2011 /PRNewswire/ — New York?based provider of wholesale brokerage services GFI Group Inc. has signed on as a presenting sponsor (the top level of available sponsorships) of the acclaimed fundraising event Stand Up for Heroes. GFI Group Inc.’s support of service members is in the company’s DNA. The firm employs service veterans as well as offering its financial support to this wildly popular benefit concert and comedy show.

For the fifth consecutive year, the Bob Woodruff Foundation and the New York Comedy Festival are partnering for Stand Up for Heroes. The event will be held on Wednesday, Nov. 9, at 8 p.m., at New York’s Beacon Theatre.

“We feel fortunate to be able to align ourselves with such an important and worthwhile cause,” said Colin Heffron, president and director of GFI Group Inc. “The Bob Woodruff Foundation has made such a difference in the lives of wounded veterans, and it is our honor to be able to contribute to its good work.”

Stand Up for Heroes is part of the Bob Woodruff Foundation’s nationally recognized public education movement and brings together leaders from business, entertainment and philanthropy to raise funds to help injured service members and their families as they reintegrate into their communities. It is the kick-off event of the New York Comedy Festival (NYCF) and has become a highly anticipated entertainment event as well as a much-needed respite for the more than 60 injured service members and their families who attend from across the country.

“GFI Group, Inc. has been the strongest financial sponsor every year we’ve hosted this event,” said Dave Woodruff, co-chairman, Board of Directors, Bob Woodruff Foundation and Group Advertising Director, Hearst Magazines. “In addition to serving as co-chairman of the Woodruff Foundation’s board, Colin Heffron is setting an example of how to operate a business with a conscience. Even in the tough economic times of the last few years, GFI Group traders paid top dollar for tickets?following Colin’s lead. We’re fortunate to have him on our side.”

Among the A-list talent confirmed to lend their talents to the Stand Up for Heroes event are Jon Stewart, Ricky Gervais, Bruce Springsteen, Jim Gaffigan, Seth Meyers, and the Max Weinberg Big Band.

Across the country, the Bob Woodruff Foundation is investing in innovative national and community-based programs that solve the full spectrum of issues that today’s service members and their families face, including education, employment and financial assistance; hidden injuries, trauma and mental health; physical therapy and rehabilitation; larger social issues and quality of life. The Bob Woodruff Foundation has invested more than $9.5 million, impacting more than 1,000,000 service members, support personnel, veterans and their families nationwide.

Tickets for the general public are available through www.ticketmaster.com, www.beacontheatre.com or www.nycomedyfestival.com. Corporate sponsor packages and VIP benefit packages can be purchased by emailing jonsie.stone@remind.org.

About GFI Group Inc.

GFI Group Inc. (NYSE: GFIG) is a leading provider of wholesale brokerage services, clearing services, electronic execution and trading support products for global financial markets. GFI Group Inc. provides brokerage services, market data, trading platform and analytics software products to institutional clients in markets for a range of fixed income, financial, equity and commodity instruments. Headquartered in New York, GFI was founded in 1987 and employs more than 2,000 people with additional offices in London, Paris, Hong Kong, Seoul, Tokyo, Singapore, Sydney, Cape Town, Santiago, Bogota, Dubai, Dublin, Tel Aviv, Calgary, Los Angeles and Sugar Land (TX). GFI Group Inc. provides services and products to more than 2,600 institutional clients, including leading investment and commercial banks, corporations, insurance companies and hedge funds. Its brands include GFI(SM), GFInet®, CreditMatch®, GFI ForexMatch®, EnergyMatch®, FENICS®, Starsupply®, Amerex®, Trayport® and Kyte®.

About the Bob Woodruff Foundation

The Bob Woodruff Foundation provides resources and support to service members, veterans and their families to successfully reintegrate into their communities so they may thrive physically, psychologically, socially and economically. Through a public education movement called ReMIND.org, the Bob Woodruff Foundation helps educate the public about the needs of service members returning from war-especially the one in five service members who have sustained hidden injuries such as traumatic brain injury and combat stress, including post-traumatic stress disorder, depression and anxiety-and empowers communities nationwide to take action. Across the country, the Bob Woodruff Foundation collaborates with other organizations and experts to identify and solve issues related to the return of service members from combat to civilian life and invests in programs that connect our troops to the help they need?from individual needs like physical accommodations, medical care and counseling, to larger social issues like homelessness and suicide. The Bob Woodruff Foundation has invested more than $9.5 million, impacting more than 1 million service members, support personnel, veterans and their families nationwide.  

For sponsorship opportunities, email Jonsie.Stone@ReMIND.org

For more information about the Bob Woodruff Foundation please visit www.ReMIND.org

SOURCE GFI Group Inc.

GFI Group Opens New Office in Switzerland

New office will broker Emerging Markets Products and Listed Products

New York, October 18, 2011 – GFI Group Inc. (NYSE: “GFIG”) announced today the commencement of operations at the offices of its new subsidiary in Nyon, Switzerland. The new office will focus on brokering emerging market products including FX, FRAs, basis swaps, interest rate swaps and government bonds in CE3 currencies (Czech Koruna, Polish Zloty and Hungarian Forint), South African Rand and Turkish Lira. The office will also offer a service in listed products.

Julian Swain, Managing Director, Head of GFI London said: “Our presence in Switzerland through our Nyon office is part of our strategy of expanding our services and products into emerging markets globally. We believe this is an area of great potential for us and a natural step in our growth strategy”. He added, “Our brokers will be working with the latest proprietary technology, offering a hybrid brokerage approach which will allow our customers a range of choice in their method of execution”. 

GFI has a significant footprint in the currencies of other emerging markets such as Russia and Latin America. The Switzerland office will further complement GFI’s participation in the Emerging Market sector at a global level. 

 

About GFI Group Inc.

GFI Group Inc. (NYSE: “GFIG”) is a leading provider of wholesale brokerage services, clearing services, electronic execution and trading support products for global financial markets. GFI Group Inc. provides brokerage services, market data, trading platform and analytics software products to institutional clients in markets for a range of fixed income, financial, equity and commodity instruments.

Headquartered in New York, GFI was founded in 1987 and employs more than 2,000 people with additional offices in London, Paris, Hong Kong, Seoul, Tokyo, Singapore, Sydney, Cape Town, Santiago, Bogota, Dubai, Dublin, Tel Aviv, Calgary, Los Angeles and Sugar Land (TX). GFI Group Inc. provides services and products to over 2,600 institutional clients, including leading investment and commercial banks, corporations, insurance companies and hedge funds. Its brands include GFISM, GFInet®, CreditMatch®, GFI ForexMatch®, EnergyMatch®, FENICS®, Starsupply®, Amerex®, Trayport® and Kyte®.

Forward-looking statement

Certain matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipate,” “believe,” “estimate,” “may,” “might,” “intend,” “expect” and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of GFI Group Inc. (the “Company”) and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: economic, political and market factors affecting trading volumes; securities prices or demand for the Company’s brokerage services; competition from current and new competitors; the Company’s ability to attract and retain key personnel, including highly-qualified brokerage personnel; the Company’s ability to identify and develop new products and markets; changes in laws and regulations governing the Company’s business and operations or permissible activities; the Company’s ability to manage its international operations; financial difficulties experienced by the Company’s customers or key participants in the markets in which the Company focuses its brokerage services; the Company’s ability to keep up with technological changes; uncertainties relating to litigation and the Company’s ability to assess and integrate acquisition prospects. Further information about factors that could affect the Company’s financial and other results is included in the Company’s filings with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

For any queries or additional information please contact:

Patricia Gutierrez
Vice President – Public Relations
GFI Group Inc.
55 Water Street, 28th Floor
New York, NY 10041
Tel: (212) 968 2964
Mob: (646) 717 4379
patricia.gutierrez@gfigroup.com